Struggling RIM's gap in new BlackBerry products viewed as opportunity for Apple

As Research in Motion's struggles continue, delays in new BlackBerry product introductions are expected to chiefly benefit Apple and the growing market share of the iPhone.

Wall Street analysts were quick to pan RIM on Friday after the company surprised with a pre-announcement of sales in its May quarter. RIM opted to disclose its sales early as the company expects its first quarter of fiscal 2012 to come in below guidance.

RIM also warned investors of impending delays for new BlackBerry product launches. That means, in the near term, RIM will have to depend on its aging BlackBerry portfolio, a situation that Brian White with Ticonderoga Securities believes is an opportunity for Apple to continue gaining market share.

"While RIMM continues to harbor high expectations for the second-half of (fiscal year 2012) as the new PlayBook begins to ramp and new smartphones are released, we believe the tide is clearly turning," White said in a note to investors Friday. "During the fall of 2010, Apple surpassed RIMM in market share and we expect this momentum to continue."

Earlier this month, Apple reported sales of 18.65 million iPhones in the second quarter of its fiscal year 2011. For comparison, that's 38 percent more than the 13.5 million units that RIM expects to ship in its May quarter.

White's pessimistic outlook on RIM's future was shared by many of his colleagues, who also issued notes on Friday. Robert Cihra of Caris & Company questioned how excited users and carriers are for this year's "evolutionary" BlackBerry OS 6.1 upgrade, as many people are waiting for a complete QNX-scaled rewrite of the mobile operating system.

Mike Abramsky of RBC Capital Markets previously had a "Top Pick" rating for RIMM stock, but downgraded to "Sector Perform" following the company's pre-announcement. "We were wrong, as mis-execution has undermined sentiment recovery," he wrote.

Charlie Wolf with Needham & Company said it's the "Android onslaught" that has finally caught up with RIM. With the company not planning to introduce phones running BlackBerry OS 6.1 until the second quarter, the company has "little ammunition (other than price) to repel this invasion," Wolf wrote.

Finally, Shaw Wu with Sterne Agee called the timing of RIM's pre-announcement "somewhat bizarre," as there is still more than a month left in the company's May quarter. He also noted that RIM revealed it has high inventory levels and lower than anticipated sell-through of its products, particularly in the U.S. and Latin America.

I see a great many mistaken assumptions in company reports about furure sales. The assumption is that their products are going to do as well as they state. It seems to be a random thing for most companies.

Now RIM is discontinuing their old OS for this new one, and their assumption is that because of it, their sales will increase. Why? Does the consumer, business or otherwise, really care that they're going to a new OS? I doubt it. What they care about is the result. Will it be stable? Will it do what they want? Will there be enough GOOD apps, etc?

There is no real answer to any of those questions yet. We see that the Playbook, using the new OS, is none of the above right now. We don't know Playbook sales, just shipments to distributers.

RIM had to get a new OS, as their old one was upgraded from their pager OS, and not suited to what these devices must do today. Whether it will make a change in RIM's fading fortunes, is an open question.

The writing's been on the wall for a while. RIM's numbers are finally taking enough of a battering to kill the last vestiges of denial; now it's entirely about how fast they can execute their QNX strategy.

I trust we won't hear any more talk about how RIM's massive corporate installed base or corporate good will or anomalous performance in Britain are all proof against decline. They simply don't have the product to compete in the modern smartphone market, and the turnover rates are brutal. It doesn't look like the Playbook is going to do them any good (probably should have waited until it was done before shipping) and RIM themselves don't seem to think they can get QNX on a smartphone till next year (something about dual cores, although like most of what they say it doesn't real make any sense). And, as Mel says, there's no strong reason to believe that even that will significantly grow sales.

I don't think their management was equipped to operate outside their safe haven of corporate email. They had one really good idea and executed very well on that idea. But it's not an idea that does them much good, any more.

They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.

take over play?
would MS get involved as it had with nokia?
who would benefit from absorbing RIM? Nokia, Moto, HTC
wow, amazing how this whole smartphone market has been changed by iPhone and app-store

RIMM really serves no purpose anymore in the 21st Century. This isn't necessarily a bad thing for them... they just need to accept it, close their doors, and move on. Companies open and close all the time. Just take a look at all the restaurants in your neighborhood... how many of them have been there for more than 10 years? RIMM just needs to accept that they served a great purpose at one point, but now that purpose isn't needed anymore. Sort of like typewriters.

I see a great many mistaken assumptions in company reports about furure sales. The assumption is that their products are going to do as well as they state. It seems to be a random thing for most companies.

Now RIM is discontinuing their old OS for this new one, and their assumption is that because of it, their sales will increase. Why? Does the consumer, business or otherwise, really care that they're going to a new OS? I doubt it. What they care about is the result. Will it be stable? Will it do what they want? Will there be enough GOOD apps, etc?

There is no real answer to any of those questions yet. We see that the Playbook, using the new OS, is none of the above right now. We don't know Playbook sales, just shipments to distributers.

RIM had to get a new OS, as their old one was upgraded from their pager OS, and not suited to what these devices must do today. Whether it will make a change in RIM's fading fortunes, is an open question.

Without knowledge that it could be upgraded to QNX, they care. Why would any company want to buy a device that could be unsupported before their contract is up. I'm sure they also care about the fact that RIM has lagged far behind their competitors. Yes companies care about these things. It is primarily why Apple has lagged behind in the enterprise for so many years and are just now making inroads.

I don't think their management was equipped to operate outside their safe haven of corporate email. They had one really good idea and executed very well on that idea. But it's not an idea that does them much good, any more.

It took a lot longer than I expected for them to show signs of distress. They have a management team providing they can operate within a bubble. I really hope they can figure out how to learn to innovate.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

The writing's been on the wall for a while. RIM's numbers are finally taking enough of a battering to kill the last vestiges of denial; now it's entirely about how fast they can execute their QNX strategy.

I trust we won't hear any more talk about how RIM's massive corporate installed base or corporate good will or anomalous performance in Britain are all proof against decline. They simply don't have the product to compete in the modern smartphone market, and the turnover rates are brutal. It doesn't look like the Playbook is going to do them any good (probably should have waited until it was done before shipping) and RIM themselves don't seem to think they can get QNX on a smartphone till next year (something about dual cores, although like most of what they say it doesn't real make any sense). And, as Mel says, there's no strong reason to believe that even that will significantly grow sales.

I don't think their management was equipped to operate outside their safe haven of corporate email. They had one really good idea and executed very well on that idea. But it's not an idea that does them much good, any more.

I think corporate goodwill died with good ActiveSync support. They now have competition. It really was never about goodwill, but lack of competition.

They should have concentrated on QNX on their smartphone before the Playbook. Devices with smaller screens are easier to develop for because they require less sophisticated UI. Instead they hinged the Playbooks success on integration with an old obsolete phone. When they do finally release QNX for the phone it will be way behind both the iPhone and Android. Doesn't make any sense to me.

Man oh man...once you allow yourself to get behind the curve in tech, it's almost impossible to regain any initiative. In Tech if you are not growing, you're dying.

The only company I can think of that successfully "came back" is Apple.

Poor RIM Apple really cleaned their clock. They hid behind enterprise and lazy IT manager's reluctance to integrate the iPhone as if that would protect them from Apple. And it did for awhile.

I think that hurdle has been pretty much removed now as evidenced by the early adoption rate of the iPads. Stunning!

Also, it seems that being first to the party with a new product is tantamount to success. Being second seems to guarantee failure, ie., Bing, Zune, Kin, Playbook, Storm, and on and on. Again, the only company that can come to the party late and succeed is Apple, eg., iPod, iPhone, iPad.

Shaw Wu with Sterne Agee called the timing of RIM's pre-announcement "somewhat bizarre," as there is still more than a month left in the company's May quarter.

I look at it this way: Are RIM better off giving one big announcement at the end of the quarter saying they missed targets, or, are they better off giving one announcement early/now saying they are coming in at the low end and THEN at the end of the quarter say that they missed targets?

The Playbook is an interesting diversion, but I think even Blackberry users are going to prefer the utility and user experience of the iPad over this thing. In short: RIM should have focused on getting the next gen BBM to market instead of the half-assed effort they put into Playbook. It's their Foleo.

Man oh man...once you allow yourself to get behind the curve in tech, it's almost impossible to regain any initiative. In Tech if you are not growing, you're dying.

The only company I can think of that successfully "came back" is Apple.

Motorola managed to come back for a few quarters, but I generally agree. I think if anybody really wants to compete today, you need to find a form factor that provides advantages over the slate smart phone. When you look at some of the problems we face today, that may not be that hard of a stretch.

Simple ways to eliminate the need for people to text when driving is a good start. Getting back to a 5-7 day battery life would be nice. Tactile phone dialing would be appreciated.

But for RIMM, they are a long way down now and that path back is a very tough one.

RIMM really serves no purpose anymore in the 21st Century. This isn't necessarily a bad thing for them... they just need to accept it, close their doors, and move on. Companies open and close all the time. Just take a look at all the restaurants in your neighborhood... how many of them have been there for more than 10 years? RIMM just needs to accept that they served a great purpose at one point, but now that purpose isn't needed anymore. Sort of like typewriters.

When they announce it, they can use their "amateur hour is over" advertising slogan.

Mobile Secure Email for Enterprises. That's it. RIMM rode that pony until it died. Never bothered to look beyond that product. They never showed any indication that they had the expertise to see beyond that product. And when the iPhone came out, I knew their goose was cooked even though back then they were churning out fantastic numbers and their stock price was flying.

How can anyone expect RIM, who had NO EXPERIENCE selling a pure consumer tech product, to survive going toe to toe with the master consumer technology company? HP, Dell & MS who have more consumer tech experience than RIM were sent reeling by the folks in Cupertino, what chance did RIM have?

That's why I never bought RIMM and told anyone who would listen back then (i.e. when iPhone became more than mere rumor) that RIMM is already dead, they just don't know it yet.

Motorola managed to come back for a few quarters, but I generally agree. I think if anybody really wants to compete today, you need to find a form factor that provides advantages over the slate smart phone. When you look at some of the problems we face today, that may not be that hard of a stretch.

Simple ways to eliminate the need for people to text when driving is a good start. Getting back to a 5-7 day battery life would be nice. Tactile phone dialing would be appreciated.

But for RIMM, they are a long way down now and that path back is a very tough one.

You can try out a hundred and one different form factors and you'll still fall flat on your face each time if that's all you're bringing to the table.

C'mon you guys. Crossing 13M in sales for a quarter is still not a bad thing. It's not like RIM has gone 15M to zero in sales. RIM can easily top Moto, HTC and even Samsung and LG when quarterly results are tallied.

I hope RIM continue to be an independent company not like Nokia, just so it can help level the playing field with their non-Android or non-Windows brand.

C'mon you guys. Crossing 13M in sales for a quarter is still not a bad thing. It's not like RIM has gone 15M to zero in sales. RIM can easily top Moto, HTC and even Samsung and LG when quarterly results are tallied.

Means nothing.

When GM went bankrupt, they were still selling millions and millions of vehicles....

I look at it this way: Are RIM better off giving one big announcement at the end of the quarter saying they missed targets, or, are they better off giving one announcement early/now saying they are coming in at the low end and THEN at the end of the quarter say that they missed targets?

It's all about managing expectations right?

So I'm picking that they might even miss the low end of the range.

It may be that RIM is willfully lowering the expectation knowing the near-actual results will easily surpass it. In this day and time in the tech world, you gotta do something to look good. More so if you are competing against Apple in corporate publicity.

When GM went bankrupt, they were still selling millions and millions of vehicles....

Ah bancruptcy...

It can be a dirty ploy to avoid liability for a time. But look at GM now - it is back on its feet, outgrossing the other manufacturers in sales in the US. RIM's reduced revenue should go along reduced fixed operating expenses. If they are still selling over 10M a quarter it means they are still relevant for the simple reason that 10M means a loss in real revenue for other competing brands. That's a lot.

Agreed! Easy to copy the form factor of the iPhone and iPad, but to deliver the quality software needed to provide an ecosystem across platforms and equipment seems impossible for other companies to replicate.

An iMac, TimeCapsule, iP4, iPad2 (wifi) and an AppleTV and one is good to go. You could even forgo the iMac and get an MBA and you have the whole Apple "ecosystem" for about $3K. May be a little more.

So 5 pieces of Apple gear and an HDTV flat screen and that's just about all the tech gadgetry one would need. Maybe an SLR as a hobby!

I've sold each of my last 3 iPhones and it has pretty much been a wash to buy the iP4. I sold my 4 year MB for $300. Paid $1,200 so a net of $900 or >$20/mo. Same with my old AppleTV; about $6/mo. And...well, you get the idea. A part from the upfront cost I spend less per month on Apple products than I do on beer and the occasional movie!

C'mon you guys. Crossing 13M in sales for a quarter is still not a bad thing. It's not like RIM has gone 15M to zero in sales. RIM can easily top Moto, HTC and even Samsung and LG when quarterly results are tallied.

I hope RIM continue to be an independent company not like Nokia, just so it can help level the playing field with their non-Android or non-Windows brand.

The thing is, when a big company starts falling, and falling fast, it becomes more & more difficult to bring that fall to a stop. It's like falling off a cliff... if someone catches you just as you start to go, it doesn't take much to pull you back. If you fall 100 feet and then someone tries to catch you, well, good luck with that.

C'mon you guys. Crossing 13M in sales for a quarter is still not a bad thing. It's not like RIM has gone 15M to zero in sales. RIM can easily top Moto, HTC and even Samsung and LG when quarterly results are tallied.

I hope RIM continue to be an independent company not like Nokia, just so it can help level the playing field with their non-Android or non-Windows brand.

Its not about getting no sales or sales compared to a competitor, its about comparison to previous successes. YoY sales is one thing shareholders should look for because it can help them determine likely trends of the company for their investments.

I dont think many are claiming RiM (or even Nokia or Dell) are dead or that they have absolutely no chance to rebound. Just look at Apples low point with an old OS foundation, a decade of poor management and products, a near nonexistent mindshare that assumed that MS was and always would be on top, and a market cap of only $5 billion. A few right decisions can change the entire landscape.

These companies (not just RiM) that failed to evolve with market still have a chance, but a long shot isnt going to keep investors happy, hence the drop in the stock.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

The only thing going for Blackberrys is their BBM 'instant message' which is free, many teenagers, college and university folk are buying them for that one feature,.. it is reported that IM will kill SMS texting,.. so hopefully Apple can include this in their next iOS

I'd disagree with with the very premise of this post. Apple doesn't need any 'opportunities' due to weaknesses in RIM. Apple is doing just fine what ever RIM does or doesn't do. In fact Apple is the the largest reason RIM is up sh*t creek without a paddle.

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

C'mon you guys. Crossing 13M in sales for a quarter is still not a bad thing. It's not like RIM has gone 15M to zero in sales. RIM can easily top Moto, HTC and even Samsung and LG when quarterly results are tallied.

I hope RIM continue to be an independent company not like Nokia, just so it can help level the playing field with their non-Android or non-Windows brand.

and when a competitor goes from 0 sales to an installed base of over 100 million in 4 years it's not a good sign for your business either

Let's see. Palm controlled their own destiny by designing and building their smartphones' hardware and software. But many factors, some out of their control, caused them to crash and burn. It didn't help that, and at the end, they wasted millions on a failed pre-netbook called Foleo.

RIM also controls their own destiny. They build and design their own hardware and software. And they too wasted millions on a mobile device. But more importantly, while they were wasting time and money on Playbook, they weren't improving BlackBerry OS or their hardware or their infrastructure enough to keep up with Apple. Good luck with the crash and burn thing there, eh.

I wonder if HP wants to hedge their bets by buying a company know for its Chiclet keyboard smartphones...

I remember when the iPhone came out, and it started to build market share, there were a lot of heated posts about the relative viability of Nokia, RIM and MS.

The argument was generally that all of those devices "already did" most of the what the iPhone could do, albeit in a bare bones way (which was good, since Apple was obviously just selling "eye candy" for stupid people), and that the iPhone was just a drop in the bucket compared to the vast installed base and quarterly sales of those behemoths.

It's startling to see how quickly Apple and the iPhone have totally disrupted the entire mobile industry, to the point that several of the biggest incumbents are actually in danger of becoming completely irrelevant, if not becoming a radically reduced shell of their former selves.

And sure, you can claim that Android has as much to do with this a iOS, but the plain fact is without the iPhone Android was never going to take the form it ultimately has, and would have been just another so-so smartphone with much less to distinguish it from Nokia, MS or RIM.

They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.

I remember when the iPhone came out, and it started to build market share, there were a lot of heated posts about the relative viability of Nokia, RIM and MS.

The argument was generally that all of those devices "already did" most of the what the iPhone could do, albeit in a bare bones way (which was good, since Apple was obviously just selling "eye candy" for stupid people), and that the iPhone was just a drop in the bucket compared to the vast installed base and quarterly sales of those behemoths.

It's startling to see how quickly Apple and the iPhone have totally disrupted the entire mobile industry, to the point that several of the biggest incumbents are actually in danger of becoming completely irrelevant, if not becoming a radically reduced shell of their former selves.

And you know what has these people even more panicked and petrified? The fact that Apple is just getting started in this business: with less than 5% of global handset sales, Apple's growth opportunities are simply mind-boggling.

Quote:

Originally Posted by addabox

And sure, you can claim that Android has as much to do with this a iOS, but the plain fact is without the iPhone Android was never going to take the form it ultimately has, and would have been just another so-so smartphone with much less to distinguish it from Nokia, MS or RIM.

It can be a dirty ploy to avoid liability for a time. But look at GM now - it is back on its feet, outgrossing the other manufacturers in sales in the US. RIM's reduced revenue should go along reduced fixed operating expenses. If they are still selling over 10M a quarter it means they are still relevant for the simple reason that 10M means a loss in real revenue for other competing brands. That's a lot.

GM would be dead now were it not for it being effectively bailed out by the US Treasury ie US Government.

The Canadian Government haven't bailed out Nortel and I don't see them bailing out RIM.

The world can live without a one trick pony mobile company that's already flogged its horse to death.

C'mon you guys. Crossing 13M in sales for a quarter is still not a bad thing. It's not like RIM has gone 15M to zero in sales. RIM can easily top Moto, HTC and even Samsung and LG when quarterly results are tallied.

I hope RIM continue to be an independent company not like Nokia, just so it can help level the playing field with their non-Android or non-Windows brand.

I suspect that the reason that RIM did the preannouncement was that even 13million is a pipe dream. I'd lay odds that their number for the quarter is less than 10million; over in the UK, they're struggling to give them away

I think RIM has two ways to slow down the fall or even turn it around.

1. Attempt to sell to a larger company like apple. The implications their will be great Apple can ensure the Enterprise market and get its hands on BBM in all it could be a huge success for apple to Buy it.

2. They start producing android or windows phone 7 handsets. Here it would keep them in business they will continue to sell phones. They can also sell their phones with packaged Black Berry apps such as BBM, enterprise email and various other programs. This will set them apart from the other android phones and making them also still look good to their current users. It would also maintain for the most part the very valuable enterprise market.